Maurice: You wrote "QUALCOMM could borrow a few billion of Alan Green$pan's newly printed liquidity and low interest rates, combine that with some QUALCOMM shares and go shopping for some really good assets to synchronize with their CDMA promotion."
Oooh, Maurice, they could... but first ask "why would they want to?"
If you define a company's business as "what it does to generate increased shareholder equity", you may see why I ask.
Since this is a classical definition of a business, it is not surprising that the SEC requires all companies to disclose it fully. Most people think it's in the lovely prose. But it isn't. Those statements for people to read are merely the clothes that wrap the emperor.
The real business is articulated in numbers. Looking deep into the finances of this company we can see where the money actually comes from. If we know where to look. We don't have current data because this secret is published only once a year and isn't shouted up in the pro-forma press releases. Nevertheless, the most recent 10-K shows about 871,090 K$ cumulative retained earnings from stuff vaguely related to CDMA technology and 4,653,818 K$ cumulative minting of QCOM bank notes minus about 8,655 K$ of losses from other things (like international banking).
This means that for every $1 that the company has ever earned, shareholders have coughed up a little over $5, so to hold $6 worth of equity. Which currently these old shareholders are happily selling to new shareholders for about $60 (an estimated figure with less than one digit of precision).
Thus new shareholders enrich old shareholders, and fill the coffers of the company.
So why would Qualcomm (the company) bother with any more real operations than they can get away with?
John
P.S. This is not an argument for the imminent collapse of Qualcomm the business. Indeed, seems to me that as goes wireless [EDIT: oops, I meant CDMA], so goes the revenue of Qualcomm. It is an argument to (a) avoid being one of those new shareholders though, and (b) for those old shareholders to hurry up and fleece new shareholders before the planet figures out (a) |
